Taxation is one of the most necessary parts of running a business, whether big or small. It is an issue that all businesses have to face at some point.
The tax world is stressful and tedious, and figuring out taxing rules can get on one’s nerves pretty fast and become very confusing. But how to reduce tax for a company, one may ask.
Below are some essential tax-saving tips that small businesses can use to make the most out of tax relief options.
Opt For The Right Business Structure
How the company is set up plays a significant role in the amount of tax that has to be paid. While many businesses focus on running as sole traders, it is best to change the structure of your business as your profits grow. This will reduce the tax payable. Here at Shield Accountancy we can advise on the best path to take and help you take the necessary steps.
Re-claim All Your Business Expenses
The key to reclaiming all your business expenses is to ensure that every purchase occurred only because of business reasons.
Never forget to claim for the purchases made during your business setups, like company formation costs or anything you may have bought in between. Save all receipts and keep a record of everything as you never know what you might be able to claim for.
Draw Out Pension Plan
As pension schemes are tax-free, contributing to these schemes can reduce your tax bill to a greater extent.
According to the general rule, your employer contributions to any pension scheme are tax-deductible so speak to your accountant and see what you can add into your pension pot each year.
Capital Allowances
A company can claim costs and spending against the profits to reduce the amount of tax payable. As long as you can claim a 100 percent capital allowance, you will quickly achieve tax relief by claiming spending as an allowable expense.
Hire a Good Accountant
If you are a small business owner, having a good accountant is a need and can save you money.
Their advice can help open greater doorways for you, like suggesting a more appropriate business structure or how to draw down money in the most tax-efficient way.
If you are looking for a good accountant Shield Accountancy has got you covered. Using the latest technology and a team of professionals, we ensure proper guidance so that your small business has the right tools to spread further.
They provide dedicated accountants to connect to an emotional level with the business owner. We have an understanding that as a small business owner, you may need someone who recognizes your finances and helps you expand your business more.
Work From Home
People operating their businesses from home are at a more significant advantage than the rest. They can apply for tax deductions for part of their household bills.
These household bills exist in a broader bandwidth, from heating or lighting to mortgage interest or rent. You can also buy property to reduce corporation tax.
Conclusion
To sum it all up, it is crucial to make sure that the structure of the tax affair is as cost-effective as possible, especially in times of many battling financial pressures.